There are a number of reasons why a business would opt to outsource many of its IT operations. Flexibility and the ability to save time free up managers for other business tasks. You can find specific talent for the projects you need. And there is the added bonus of reducing costs. As with all industries, IT outsourcing has trends that change depending on outside influences.
Many are predicting massive changes in IT outsourcing in 2020. For you to successfully outsource in the near future, you should be aware of what to expect and know how to handle the changing situations.
IT Outsourcing Today
Based on the information provided by Statista from 2017, the IT areas most outsourced were software, web, and mobile app development, software maintenance, datacentres, and IT infrastructure. Other popular areas were helpdesks, networks, integrations, and HR.
These areas will continue to be outsourced; there will be modifications that will affect IT outsourcing trends.
IT Outsourcing Trends Review
The National Outsourcing Association carried out significant research on the outsourcing market for 2020. Their studies predict changes in the following areas:
Automation- This topic covers a wide range of subjects from Artificial Intelligence to bots. We are likely to see an increase in automation due to businesses using it for virtual support.
Multiple providers– Up until now, many will choose to use one outsourcing company for all tasks on a project. In 2020, businesses will start using more than one provider to access a larger range of specified skills. On the downside, communicating between various outsourcing companies might provide complications.
Cloud-based platforms- Even now, more and more businesses are switching to cloud-based platforms. This is expected to dramatically increase in 2020.
Emerging Business Models- The types of contracts between clients and outsourcing companies are likely to become more outcomes-based. As more partners will be working together on a single project, the responsibility will be shared among them.
Emphasis on value rather than price- while the costs will always remain significant, 2020 will see more attention paid to those who can offer the highest value instead of the lowest price.
New outsourcing locations- Central and Eastern European countries are going to be used for their outsourcing skills a lot more.
More Specific Trends For IT Outsourcing In 2020 And Beyond
The above trends may be around for the duration of 2020 and even longer, however, the following are more interesting and perhaps more crucial to keep an eye out for:
Contracts- The contracts being signed will be more suitable for the future market. They will have shared responsibilities and shared risks. The focus of the contract will be more on the value and outcome than it is today.
Delivery- Things will become quicker, the notice period, the length of the contract will all be shorter as there will be more emphasis on the outcome. This will make way for the possibility of more contracts between the client and the outsourcing company in the future.
Reasons for outsourcing- Instead of only looking to reduce costs, businesses will outsource for different motivations, for example, to enhance the customer’s experience. This will lead to a general growth in the IT outsourcing market.
Transformation- IT outsourcing companies will have to change their operations in order to meet the demands of the client. Clients are going to want better products and services in a shorter period of time. Clients will want outsourcing companies or are flexible and innovative. To stay ahead of the game, Outsourcing companies will have to be ready to provide what the clients want.
Automation- Virtual agents and bots will take over much of the manual processes a business has. Chatbots are going to gain more popularity as companies want to be able to provide 24/7 customer service. As a result, intelligent automation and AI will boom. In particular, look out for the advances being made in robotic process automation, and more demand for big data analysts and AI specialists.
Cloud sourcing- As more businesses switch to the cloud, there will be more demand for public cloud platforms and data storage. At the same time, providers will begin to work with online data centers. Cloud sourcing opens up more risk for businesses, therefore, along with a growth in cloud sourcing, there will be a growth in cybersecurity.
More collaboration, more competition
If more outsourcing companies are going to work on one project, communication will have to be at its best to guarantee the success of the project. Success rates will increase when partners learn to share ideas, insights, and risks. As the IT outsourcing market changes and grows, the competition will be fiercer.
Just as the IT industry develops at an incredible rate, so will the IT outsourcing industry. It is going to be essential for outsourcing companies to adapt to the way they work in order to meet the changing demands of the clients. In 2020, it’s going to be more than just knowing your technology.